At Visio Lending, we tailor our loan products to meet our borrowers’ needs. We’ve coined the terms “permanent rental” and “transitional rental” to describe the two main investment strategies our borrowers use. At one end of the spectrum, the permanent rental is for the rental property that an investor wants to hold onto forever. The transitional rental, on the other hand, is the property the investor wants to sell at the right time, based on market conditions. Here is a look at how our rate structures – 5/1 ARM, 7/1 ARM, and 30-year fixed-- fit into these two investment strategies:
5/1 ARM
Strategy best for: Transitional Rental
Use when: You want flexibility to sell your property immediately, if need be. Investors who select the 5/1 ARM structure are typically planning to sell their property within five years.
Pair with: Our low origination fee options, so you spend low money upfront.
7/1 ARM
Strategy best for: Transitional Rental
Use when: You want flexibility to sell your property soon but want to wait on best market conditions. Investors who select the 7/1 ARM structure are typically planning to sell their property within seven years.
Pair with: Our low origination fee options, so you spend low money upfront.
30-Year Fixed
Strategy best for: Permanent Rental
Use when: You want to hold onto your property long-term and pass on to your children. This is the set it and forget it financing option.
Pair with: Our higher origination fee options. You may spend more money upfront, but in the long run you will save money by lowering your monthly payments.
Learn more about our Loan Programs and borrower requirements from our FAQ Page or contact us to get started on your loan.
Editor's Note: This post was originally published in May 2019 and has been updated in June 2020 for freshness and accuracy.
Related: Understanding Prepayment Penalties, Understanding DSCR
